Shopper Experience
03 March 2023
Uber Eats drivers now have the option to shop, check out items
With Shop and Pay, Uber is adding grocery capacity.
(Photo courtesy of Uber Eats)
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Uber Eats is adding shopping to its on-demand delivery services.
The news: Uber Eats released more details Friday on Shop and Pay. It’s billed as a new opportunity for drivers to earn more by going into grocery stores and other retailers to pick and check out items, in addition to completing delivery. This adds a new dimension to the service offered by Uber Eats. Additionally, it cuts out the need for additional fulfillment operations. More than 200,000 couriers are already using the service, Uber said.
How it works: The new features required Uber to add a number of features to its app.
“Rather than doing just one thing—picking up and dropping off fully prepared orders—Shop and Pay offered a new set of interactions,” wrote Therese Lim, head of product management, for grocery and new verticals at Uber. “Shopping and checking out requires more: asking questions of customers, paying for orders, and knowing what to do when the store runs out of oat milk.”
With this, Uber included capabilities for couriers on the app, including:
- Order information, including number of unique items, and whether it contains a large, heavy or fragile item.
- Barcode scanning to help couriers find items.
- Substitution recommendations for items that are out of stock.
- If an item is out, couriers can use Uber-issued digital payments or their own cards for reimbursement.
- In-app chat with customers
Key quote from Lim: “With 100,000 grocery and new vertical storefronts across the world, our ambitions are big, and we’re committed to helping consumers find more of what they’re looking for on the app. Building a strong experience for shoppers—guided by their feedback—will be critical to our success, and we’ll keep it a top priority.
What it means for delivery
Everyone is building the same business. While this service is relatively new to Uber, it’s familiar to consumers. That’s because Instacart popularized the model of working with on-demand couriers to grab items from shelves and deliver them. Uber Eats started in a different place, initially by offering meal delivery. But it has since expanded to deliver items from retailers, and offering a marketplace where users can shop items. This adds another layer to that experience.
Fulfillment savings. Anytime delivery is involved, costs become a big issue. Providing fulfillment can be resource intensive, even as it provides great service to shoppers. That's especially true in grocery, which often involves many items across a variety of categories. Employing existing drivers is one way to potentially create more efficiency. Uber didn’t release any data on this. But since the service is expanding, it’s a good bet that there are cost advantages to be had. Intriguingly, this return to the older Instacart model skips over the generation of instant delivery startups that provided fast delivery from out-of-store fulfillment sites. That model became popular in the pandemic, but has since faced challenges in realizing cost-effectiveness amid a return to more in-person shopping and a venture capital pullback when the market turned.
It’s not just the app. It’s people. Uber’s update implicitly acknowledges that consumers are not its only users. Couriers are users of Uber’s technology. Given their role in Uber’s business model, they are a constituency that must be served in and of themselves. While Uber’s model has long recognized this as it employed drivers, the additional shopping and payment work that is now being completed outside of a vehicle brings added complexity. Listening to this group and understanding their needs will be important to the success of this expansion, right alongside the effectiveness of the technology that is implemented.
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Marketing
09 June 2023
'There's a lot of ways to frame value'
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
Photo by Kelly Common on Unsplash
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.
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